The volume of residential construction in Russia in December 2024 decreased by 19.1% to 13.9 million m² compared to December 2023. The reasons include the cancellation of preferential mortgage programs in July 2024 and the increase in the Russian Central Bank's key interest rate, which affected mortgage rates.
In this context, by the end of 2024, mortgage issuance in Russia fell by nearly 40%. In the first weeks of January 2025, the decline worsened, reaching 78–80%.
The lack of mortgage lending directly impacts developers' sales and exacerbates the systemic problems in the industry.
As of January 2025, Russian developers accumulated $47.3 billion in debt, the majority of which consists of loans with variable interest rates tied to the Central Bank of Russia's key rate.
According to expert estimates, in 2025, one in three developers in Russia will become unprofitable, considering the rising construction costs and debt servicing expenses.
Problems in the construction sector of Russia are one of the indicators of systemic crisis phenomena in the Russian economy. Throughout 2025–2026, the crisis will only deepen. This will inevitably lead to mass defaults among Russian construction companies and simultaneously create even greater risks for Russia's banking system.
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